Sunday March 29, 2009
Bankers silent about their complicity
Suppose a robber bursts into a church this Sunday morning. He passes the collection plate around; then he grabs the givings and drives off in his Mercedes.
Suppose further that you knew the robber; you\’d even heard him brag about his planned heist.
What should you do?
Obviously, if you withhold information that would enable police to track down and arrest the thief, you are guilty of collaborating in a crime.
You are also guilty of complicity if you know about a crime and do nothing to prevent it.
Of course, you could always keep your head down and hope nobody notices you.
Right now, banking executives around the world are taking the third option. They\’re hoping that people will focus their anger on the senior executives of AIG, the world\’s largest insurance corporation, and overlook the complicity of others in the industry.
Lightning rod for anger
Certainly, AIG hogs the spotlight right now. More than 400 employees received bonuses — estimated by Connecticut Attorney General Richard Blumenthal at $218 million — paid from the $165 billion bailout funded by U.S. taxpayers. At least 73 employees received bonuses of $1 million or more.
As a result, according to company CEO Edward M. Liddy, AIG bonus recipients have been subjected to widespread scorn, even death threats.
A busload of upset citizens took their protests to the estates of some AIG executives in Fairfield County, Connecticut.
But AIG is not alone. France has had riots. Fred Goodwin, who retired last year from the Royal Bank of Scotland with a $30 million pension fund, had his mansion and car in Edinburgh vandalized by a group calling itself “Bank Bosses Are Criminals.”
There is, I admit, a clear legal distinction between my hypothetical church robber and real-life financial executives. Robbery is a crime. Manipulating a financial system is not.
Even if it creates the biggest financial meltdown of our time.
Even if it does more damage to the American economy than the 2001 attacks on the World Trade Center and the Pentagon.
Even if it destroys the savings of more people than Bernie Madoff\’s ponzi scheme – billed as the biggest investment fraud in Wall Street\’s history.
But like that fictional church robber scenario, other members of the financial community knew what was going on.
Admittedly, few had personal knowledge of the individuals who ripped off public funding for private bonuses. But they knew that the business practices producing all those extraordinary profits were dubious at best, dishonest at worst.
Guilt by association
I\’m sure that the huge majority of financial and investment executives are hard-working, honest, and conscientious. But it\’s their job to know how money is being used, by whom, and for what. If they didn\’t know, they\’re incompetent. If they did know, they\’re complicit.
And even if they kept their own noses clean, they\’re now tarred with the same brush.
No one likes guilt by association. It leads to assumptions, for example, that all Asians belong to gangs, that all blacks got rhythm, that all blondes are stupid, that all priests are pedophiles…
But at the same time, we cannot avoid being tainted by the kind of company we keep.
Every year since 1976, the Gallup organization has published a ranking of professional credibility. In their most recent poll, nurses topped the list – again – with an 84 per cent rating. Lobbyists and telemarketers crawled along the bottom, with five per cent. Business executives earned just 12 per cent, no doubt reflecting scandals like Enron and WorldCom – about the same credibility as politicians.
But the big losers in Gallup\’s 2008 study were bankers. Long considered pillars of the community, bankers used to enjoy around 40 per cent credibility. In two years, their rating plunged to just 23 per cent.
By the end of this year, I\’d guess they\’ll come in even lower than lawyers.
Protecting the institution To receive this column regularly via e-mail, send a request to jimt@quixotic.ca. E-mail subscribers also get excerpts from correspondence about these columns. Please forward a copy of this column to anyone who might be interested in subscribing.
If you want to order my books, you can call 1-800-663-2775 in Canada, 1-800-328-0200 in the U.S., or order them on-line at the Wood Lake Books website.
For a lighter look at ethics, faith, and life, I recommend Ralph Milton\’s weekly e-newsletter Rumors. You can subscribe to it at the Wood Lake Books home page in Ralph Milton\’s Site, or by sending a note directly to ralphmilton@woodlake.com.
It\’s also worth pursuing Charlene Fairchild\’s United Online site. Another site worth visiting is David Keating\’s \”SeemslikeGod\” page.
Because of a few bad apples, the whole barrel gets bad reputation.
But it didn\’t have to be that way.
The banking community could have spoken up. They could have denounced the flim-flam that made some people huge fortunes, that rewarded executives for playing fast and loose with other people\’s money, that encouraged consumers to dive deeper and deeper into debt and then penalized them…
They didn\’t. They preferred to keep their heads down, to hope everything would work out.
Their plight should be a lesson to all who blindly maintain professional solidarity.
Dentists know who does shoddy work. Engineers know who cuts corners. Veterinarians know who pushes high-cost tests instead of informed diagnoses. Bishops know which priests show an unhealthy interest in altar boys.
When they cover up for their colleagues, they think they\’re protecting their institution. They\’re not. As the Boston Archdiocese of the Roman Catholic Church discovered, covering up ultimately makes the scandal worse. Arthur Anderson\’s unwillingness to keep Enron honest dragged the whole accounting profession under suspicion.
The only way to protect a profession is to root out the rotten apples before they contaminate the whole barrel.
=====================================
Copyright © 2009 by Jim Taylor. Non-profit use in congregations and study groups permitted; all other rights reserved.
=====================================
PROMOTION PLUGS
